Violent protests in Greece lead to 3 deaths
Asian shares have fallen sharply today as fears mount that Greece’s crisis would spread to other European countries.
In an interview with French newspaper, La Parisien, the head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, admitted earlier this week that the possible spread of the crisis was a concern.
He said: “We have to succeed in avoiding contagion… we should remain vigilant.”
Concerns have led shares to fall with the Nikkei index closing 3.3% down after it reopened following a three-day holiday.
It was the Nikkei’s biggest one day loss since March 2009. Meanwhile, Hong Kong’s Hang Seng dropped 221.47 points to reach 20,106 while the Composite index in Shanghai fell 1.7% to 2,808.3 points.
Meanwhile, the euro which has been de-valued since the outbreak of Greece’s crisis, was trading at $1.2821, down from $1.2823 late yesterday.
The European Central Bank (ECB) is under severe pressure to show how it plans to strengthen the euro.
The ECB is currently in the midst of its interest rate setting meeting and will announce its decision later today. It is widely expected to keep interest rates on hold at the historic low of 1%.
Interest rates are expected to remain on hold until at least 2011, as a result of uneven growth and low inflation.
Meanwhile, the Greek Government is expected to pass a vote on the austerity measures attached to the financial rescue plan later today.
However, the further austerity measures have resulted in Greek workers staging strikes across the country, which led to three deaths in Athens yesterday after protesters set fire to a bank.
Greek unions have today called for more protests at the further austerity measures, which include deeper cuts in pensions and public servants’ pay, as well as a fresh hike in consumer taxes.
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